Cheating under Regulation: Evidence from “Yin-and-Yang” Contracts on Beijing’s Housing Market

Yanke Dai and Yangfei Xu ()
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Yanke Dai: School of Business, Shanghai University of International Business and Economics, Shanghai 201620, China
Yangfei Xu: School of Business, Shanghai University of International Business and Economics, Shanghai 201620, China

Sustainability, 2022, vol. 14, issue 20, 1-29

Abstract: This paper reveals the role of Yin-and-Yang contracts in evading transaction regulations in China’s housing market. Using micro-observations of Beijing’s housing resales, we find buyers are engaged in “Yin-and-Yang” contracts with higher degree of under-reporting during “the most stringent regulation in history”. We then estimate the extra tax loss from this further under-reporting as an unexpected side effect of regulation policies. Moreover, since “Yin-and-Yang” contracts put more liquidity pressure on the buyers, we also investigate the potential crowding-out effect and enlarged inequality after regulation.

Keywords: home-purchase regulations; “Yin-and-Yang” contracts; liquidity constraint; enlarge inequality; extra tax loss (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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